Cross-border supplies: change in VAT rules as of 2020

19 September 2019 - As of January 2020, all EU member states will introduce a number of new VAT rules aimed at improving the European VAT system for cross-border supplies in the short term. These new rules are also important for internationally operating entrepreneurs in the transport & logistics sector. This applies in particular to entrepreneurs who act as tax representatives for foreign entrepreneurs and in doing so report on cross-border supplies.

Tax representatives

Tax representatives are partly liable for VAT that the foreign entrepreneur must pay to the Tax and Customs Administration. It may be costly for a tax representative if an incorrect VAT payment is made in respect of cross-border supplies made by their customers. It is therefore advisable to properly prepare for the amendment of the VAT rules.

Main VAT changes from 2020 onwards: ‘Quick fixes’

As of January 2020, four short-term measures will be introduced, mainly aimed at entrepreneurs who act as tax representatives for foreign entrepreneurs and in doing so report on cross-border deliveries:

For the application of the VAT zero rate in the case of intra-community supplies of goods (B2B), it will be mandatory to have the customer's VAT identification number. According to case law, this number is not a material condition, but that is about to change. In the absence of a correct VAT identification number, the basic assumption is that 21% VAT is applicable.
Simplification and harmonisation of the rules on call-off stock: stocks held by companies in a member state other than the member state of establishment in order to be able to sell quickly on demand to already known customers. Several countries have a simplification scheme in place for this purpose that requires compulsory VAT registration in the country where the stock is held; other countries do not have such a scheme in place. From January 2020, it will no longer be necessary, under certain conditions, to have a VAT registration for such transfers in the member state where the stock is held. However, a record must be kept of the transfers and the VAT identification number of the customers concerned must be submitted periodically.
Clarification of the rules for entrepreneurs to prove that goods have been transported from one member state to another, which is a prerequisite for applying the VAT zero rate.
Simplification of the rules for ABC transactions. It will be easier to determine which transaction in a chain or ABC transaction concerns cross-border supply.

What can Mazars do to help you?

Mazars' VAT specialists can help you implement these ‘quick fixes’ in your daily activities. In addition, Mazars offers a ‘VAT number check’ that can be used to check the validity and accuracy of a large number of VAT numbers.